{"id":7512,"date":"2018-01-12T21:51:12","date_gmt":"2018-01-12T21:51:12","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=7512"},"modified":"2018-01-12T21:51:12","modified_gmt":"2018-01-12T21:51:12","slug":"sp-500-earnings-update-check-these-earnings-revisions-to-reality-check-2018-rally","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=7512","title":{"rendered":"SP 500 Earnings Update: Check These Earnings Revisions to Reality Check 2018 Rally"},"content":{"rendered":"<p>Check the numbers this week:<\/p>\n<ul>\n<li><em><strong>Fwd 4-qtr estimate:<\/strong><\/em> $150.32 vs last week&#8217;s $147.94 (highly unusual to see this kind of sequential increase)<\/li>\n<li><em><strong>P.E ratio:<\/strong> <\/em>18.5x<\/li>\n<li><em><strong>PEG ratio:<\/strong><\/em> 1.40x<\/li>\n<li><em><strong>SP 500 earnings yield:<\/strong><\/em> 5.40%, vs last weeks 5.39% (despite 3% SP rally for 2018, the SP 500 earnings yield has actually increased the last two weeks)<\/li>\n<li><em><strong>Year-over-year growth of fwd estimate:<\/strong><\/em> +13.24% versus last week&#8217;s 11.46%<\/li>\n<\/ul>\n<p>(Source: Thomson Reuters I\/B\/E\/S, &#8220;This Week in Earnings&#8221; dated 1\/12\/17)<\/p>\n<p>Note that despite the 1.55% increase this week in the SP 500, the SP 500 &#8220;earnings yield&#8221; actually increased.<\/p>\n<p>Note too also the substantial jump in the &#8220;y\/y growth of forward estimate&#8221; to 13.24%.<\/p>\n<p>That is amazing &#8211; we see an almost 200 basis point sequential increase in the SP 500&#8217;s forward growth estimate.<\/p>\n<p>Expected growth of 13% at a market trading at 18x earnings is a reasonably-valued stock market.<\/p>\n<p>The jump in the forward estimate this week (first bullet point) is highly unusual: we typically only see that kind of sequential magnitude change in the forward estimate when we roll into the first week of the new quarter.<\/p>\n<p>The forward estimate two weeks ago was $143, so we&#8217;ve seen a $7 increase in the forward estimate in just the last two weeks.<\/p>\n<p>The y\/y growth rate of 13% (expected) has to be the highest print since pre-2007.<\/p>\n<p>Now, I&#8217;m understanding why Ralph Acompora had to sit down.<\/p>\n<p>This is going to be a tough year for bonds, particularly Treasuries. The US economy&#8217;s &#8220;governor&#8221; is likely behind the curve (no pun intended) already.<\/p>\n<p>More this weekend &#8211; thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Check the numbers this week: Fwd 4-qtr estimate: $150.32 vs last week&#8217;s $147.94 (highly unusual to see this kind of&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[162,155,91],"tags":[],"class_list":["post-7512","post","type-post","status-publish","format-standard","hentry","category-sp-500-earnings-yield","category-treasuries","category-weekly-earnings-update"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7512"}],"version-history":[{"count":2,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7512\/revisions"}],"predecessor-version":[{"id":7514,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7512\/revisions\/7514"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}